Despite early market growth predictions, the global financial crisis has cast a shadow over the solar power sector.
London, UK (May 13, 2009): Research Analysts’ new report, Global Market Review of Solar Photovoltaic Power Generation, predicts an eventful few years in this sector of the renewable energy industry. While generating capacity will increase, there is some uncertainty in the industry regarding the pace of growth.
What is clear, though, is that solar power investments will be affected by the cost and availability of financing. The current crisis is impacting the short-term availability of finance with a knock-on effect on demand for photovoltaic power. Consequently, the established market leaders are restructuring their capital expenditure and optimising credit facilities.
Meanwhile, a number of players from other industrial sectors are entering the solar industry, including Intel, GE, Hewlett Packard, Samsung, LG and Bosch.
As the market continues to grow – albeit at a slightly slower pace than in recent years -- cost reductions will be achieved through improvements in technology, economies of scale and increased efficiency in all parts of the value chain. The report shows the ways in which the major players are preparing to extend their global reach by looking at new countries to establish operations beyond the main photovoltaic markets in Germany, Spain, Japan and California.
Yet the solar photovoltaic power industry still faces a number of challenges. Solar energy is unable to compete with fossil-based energy sources. One of the key issues for the photovoltaic market is therefore to match the price of photovoltaic energy to traditional sources within the next few years. The report shows how grid parity will be reached progressively from 2010 onwards in several European countries; Italy will blaze the trail, closely followed by Spain and then Germany.
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About Research Analysts Ltd
Research Analysts Ltd specialises in solar photovoltaic market research. Its latest report, Global Market Review of Solar Photovoltaic Power Generation, considers the current status and prospects of the major national solar photovoltaic markets. It includes comment and coverage from the major manufacturers, setting out the ways in which they are overcoming various hurdles to commercialisation. It considers the current status and prospects of the main national solar markets, namely Germany, Spain, Japan, US, Italy, France, South Korea and India.
Grid parity occurs when photovoltaic generation costs are equal to or lower than the retail electricity price.
The two biggest requirements for solar photovoltaic products are total system cost reduction, including installation costs, and reliability in continuing to generate stable output over the long term. The factor with the biggest impact on cost is conversion efficiency. As conversion efficiency increases, cost, in turn, will decrease.
The German photovoltaic market is growing continuously. A key driver of growth is the German feed-in tariff system. A feed-in tariff works by guaranteeing a long-term premium payment electricity generated from renewable sources and fed into the grid. The government fixes the level of the tariff to be paid and sets the length of contract.